McNAMARA-O'HARA SERVICE CONTRACT ACT COMPLIANCE GUIDE - Army

McNAMARA-O'HARA

SERVICE

CONTRACT

ACT

COMPLIANCE

GUIDE

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Disclaimer

The Department of Labor is providing this Compliance Guide and related

materials to facilitate access to information on the McNamara-O'Hara

Service Contract Act. This Guide is intended as general information only

and does not carry the force of legal opinion. The Federal Register and the

Code of Federal Regulations remain the official sources for regulatory

information published by the Department of Labor.

INDEX

TO

SCA GUIDE

I

Scope and Intent

II

SCA Coverage -- Geographical Range, OwnerOperators

III

Wages Required under the SCA

IV

Travel and Wait Time

V

Records Required I

VI

Questions and Answers

VII

Enforcement

VIII

Glossary

REFERENCE MATERIALS

The McNamara-O¡¯Hara Service Contract Act

()

Title 29, Code of Federal Regulations (C.F.R.): Parts 4, 531, 541, and 785

() or ()

U.S. Department of Labor, Prevailing Wage Resource Book, October 2010

()

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I. SCOPE AND INTENT

THE MCNAMARA-O'HARA

SERVICE CONTRACT ACT (SCA) (41 U.S.C. ¡ì¡ì 6701-6707)

SCA Legislative History and Purpose

? The SCA became effective in January 1966. The law was amended in 1972 and

1976. It is the most recent of the government contract labor standards laws

administered by the Wage and Hour Division (WHD).

? The SCA was enacted to, in effect, ¡°close the gap¡± in labor standards protection

between supply contracts subject to the Public Contracts Act and construction

contracts subject to Davis-Bacon Act. (Services were the only remaining

category of federal procurement not covered by labor standards laws.)

? The SCA was intended to remove wages as a factor in the competition for federal

service contracts by requiring the payment of not less than the locally prevailing

wage rates and fringe benefits, or in certain cases, the wage rates and fringe

benefits contained in a predecessor contractor's collective bargaining agreement

(section 4(c) of the Act). (Labor costs are often the predominant factor affecting

bids on federal service contracts being awarded to the lowest bidder.)

SCA Requirements

? The SCA applies to most contracts entered into by the United States or the

District of Columbia that are principally for the furnishing of services through

the use of service employees.

? The major SCA labor standards provisions are:

?? Prevailing minimum wage and fringe benefit compensation standards for

service employees working on contracts over $2,500, and Fair Labor

Standards Act (FLSA) minimum wages for contracts of $2,500 or less.

?? Recordkeeping and posting requirements as contained in 29 CFR 4.6.

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?? Safety and health protection.

? WHD has sole SCA enforcement responsibility of the wage and fringe benefit

requirements of the SCA, while the Occupational Safety and Health

Administration (OSHA) enforces the safety and health provisions of the SCA.

This Guide has been created to assist service contractors on the performance of

their contracts.

It is not a legal document. The source references stated within are to be used in

conjunction with this Guide.

Compliance

Recent experience has shown certain types of noncompliance recur in SCA

transportation contracts. In all cases, the contractors made an after-the-fact wage

payment to their employees because:

? they paid a rate below the rate stipulated in the

contract;

? they paid a "trip rate" which was insufficient to

cover the stipulated rate and fringe benefits;

? they failed to pay for down time and start-up time

needed for breakdown, dock waiting time, safety

checks, gassing and warm-up of the vehicle;

? they failed to separately state fringe benefits; and

? they paid certain owner-operators as though they were

not subject to the SCA.

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